Woodside to Buy Shell's North West Shelf Oil Stakes

Woodside to Buy Shell's North West Shelf Oil Stakes (Update2)
By Madelene Pearson

Woodside Petroleum Ltd., operator of Australia's North West Shelf venture, agreed to buy Royal Dutch Shell Plc's oil stakes in the partnership for $398.5 million.
The assets include stakes in the Cossack field and the Egret discovery, Perth-based Woodside said today in a statement. The purchase price is equivalent to $18.71 a barrel, it said.
Buying the Shell stakes will boost Woodside's cash flow and earnings, Chief Executive Officer Don Voelte said. The A$20 billion ($17.9 billion) venture is the nation's largest resource project, accounting for more than 40 percent of oil and gas output.
``The North West Shelf has laid a sound business platform for Woodside over two decades and we are very pleased that this transaction will further consolidate our position in the North West Shelf Ventures,'' Voelte said in the statement.
Woodside fell as much as 50 cents, or 1.1 percent, to A$44.35 on the Australian Stock Exchange and was at A$44.39 at 10:14 a.m. in Sydney. The stock has gained 20 in the past year, compared with the 5.5 percent fall in the benchmark S&P/ASX 200 Index.
The agreement covers Shell's stakes in the Cossack, Wanaea, Lambert and Hermes oil fields, including the Cossack Pioneer production facility, Woodside said. The fields can produce 150,000 barrels of oil a day, according to Woodside's Web site. The venture is located about 112 kilometers (70 miles) northwest of Karratha in the north of Western Australia.
BHP Billiton Ltd., BP Plc, Chevron Corp., Woodside's 34 percent shareholder Royal Dutch Shell and a venture between Mitsui & Co. and Mitsubishi Corp. have stakes in the project.
Libyan Venture
The agreement covers estimated proved and probable reserves of 21.3 million barrels of oil equivalent and an additional 9.3 million barrels of contingent resources, as at August 1, 2007, the company said in the statement to the exchange.
Under a related accord, Shell will have a ``right of final offer'' for Woodside's assets in Libya, should it go ahead with a sale, the company said. Woodside has said it's studying options in relation to its remaining African assets, which may include a sale.

To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net
Last Updated: February 10, 2008 19:08 EST